The largest IT budgets and main technology trends of the Russian market. Results of 2017

Growth resuming

The volume of the Russian IT market in 2016, according to TAdviser, was more than 900 billion rubles, and in 2017 increased, by estimation, by 14% - to 1.026 trillion wheels. This assessment includes sales of the equipment (servers, DWH, the PC, notebooks, the UPS, printers and the MFP), the software and IT services (including cloud services), without sales accounting of mobile devices (smartphones, tablets) in B2C segment.

National economy already shows signs of an exit from the longest period of recession for all Post-Soviet period, consider in Rosstat. The business climate for development of IT becomes, at last, favorable, note in the Center of tactical researches of Institute of statistical investigations and economies of knowledge of Higher School of Economics National Research University. According to pilot inspection more than 600 organizations rendering IT services, the index of entrepreneurial confidence (IEC) in the industry for the first time since 2014 received positive value (+2%). About a third of the polled heads expect preserving of positive dynamics of demand for IT services and in 2018.

Most the research organizations also fix improvements in domestic IT market. The Russoft association notes return to growth at the level of 3-5% at the end of 2016. According to IDC, in 2017 positive dynamics is confirmed by data on deliveries of smartphones (+19%), desktop PCs (+6% after 3 years of continuous decrease), cloud services (+50% in an IaaS segment) and devices for printing (+16%).

IT budgets started over again growing, - Tagir Yapparov, the chairman of the board of directors of IT Group confirmed to TAdviser. - Growth not radical - up to 10% in rubles, but is already noticeable factor to speak about change of dynamics. The pent-up demand begins to work. Many projects which were preserved to "good life" open today. The digital economy expands a field for implementation of IT

Vladimir Yeliseyev, the CEO of Jet Infosystems company adheres not to a so unambiguous position.

The greatest dynamics was shown by an oil and gas sector where IT budgets rose more than by 1.5 times in comparison with 2016. As a result many projects which we began in 2016 as pilot developed into real implementations. But some industrial enterprises from among our customers regarding IT were forced not only to refuse development projects, but also to cut down the current needs a little. In retail and insurance the situation was stable. In the banking sector the success of financial institution in the market was the defining factor: for several representatives from top-10 we implemented a number of large-scale projects whereas small banks fought for survival. As for telecom operators, their IT budgets in 2017 were directed more towards development of the networks and creation of new technology platforms for providing additional services to clients

2018 inspires in market participants more optimism. The customers aimed at development of the business will make more actively investments in IT. At the same time the preference, according to Yeliseyev, will be given to the experienced partners capable it is not simple to solve complex IT tasks, but also to optimize project budgets and also is accurate and transparent to prove need of these or those costs before business.

The main factor of increase in demand for IT solutions is their financial performance: as far as this or that technology will help the customer to increase profit or to reduce costs. The more flexibly and more productively for business a product, the higher on it demand. There passed time when it was possible just to sell and implement "iron" – customers wait not just for integrator in former understanding of this word, and the full-fledged business partner on IT today. So it is necessary not only to be permanent in a trend regarding technologies, but also to understand features of business of the customer and to be able to offer in time it the best of the solutions on the optimal price which are available in the market supported with necessary competences and experience, - the CEO Jet Infosystems is sure

Besides, there are new markets (the smart city, Internet of Things and so forth) – rather big and perspective which will be constructed by other principles than traditional IT, Tagir Yapparov adds. The main difference, according to him, will be that these markets will be based on public-private partnership - not the technology, but the invested solution will be a product.

The fact that there is a technology will be key and there is an investor who invests in creation of the working system. Will senselessly go and sell technologies. It is necessary to become a part of the complete solution. So far not so large-scale new niches on the budget, but in the long term they will develop and come rather dynamically to large volumes, - Yapparov is sure

Customers confirm change of the relation to the IT budget.

In 2017 we began to look in a new way at budgeting, - TAdviser with the Head of the Moscow Department of Information Technology of VTB bank Sergey Baranov was said in an interview to TAdviser by Sergey Baranov, the Head of the Moscow Department of Information Technology of VTB bank. - It occurred after formation of IT strategy 2019 which responds the business strategy of VTB to the requests. We broke expenses on two conceptually different directions. One of them can just be carried to operating expenses, so-called Run The Bank, and the second – Change The Bank the fact that we invest in development of our systems, in development of the innovation approaches and delivery of fast result for business. We are aimed at expense reduction in the first direction and growth on the second

The budget of Dixy, according to the Chief information officer of the company Vladimir Muravyov, affirms according to regulations and consists of two components. The first part of the budget is an account part on accomplishment of regulatory requirements of the state (the Unified State Automated Information System, the Mercury system, execution of fiscal functions). The second part is connected with business initiatives, and this component of the budget is blurred between different business divisions and IT structure. Thus, today there is not an IT budget as such, but the funds allocated for joint work of business and the IT block.

The IT department follows the development strategy of the company. As capital asset of any retailer – the buyer, and two main drivers – traffic and an average bill, the strategy of Dixy is based on changing approach to the buyer, to make for it something new today today. According to strategy the budget will increase by shops which reformatting is planned for the next year. Expenses and on a regulatory part of the budget, and on IT initiatives of implementation of innovations on the basis of modern technologies will grow. So dynamics of the budget positive, - Muravyov adds

The largest customers

"Defrosting" of IT budgets in Russia goes slowly and systematically. Most of all still spend banks for IT (26% of the total amount of the IT market, taking into account the Central Bank), an oil and gas industry (25%) and a public sector (17%, considering only costs of a federal executive authority and ROIV).

Correlate a share of IT costs to volume generated in each industry of revenue/turnover makes certain difficulties owing to lack of uniformity of approach. So, if in the banking sector to take only a financial result for a reference point, then the share of IT costs in it will make about 26%. At the same time in retail the indicator from a total turnover of the industry will appear less than 1%. For comparison, in world practice the share of IT costs from revenue on average varies today from 1.5% (Khimprom) to 4.4% (transport), according to CEB.

If to select TOP 100 of the largest companies of Russia on revenue (being guided by the ratings of RBC and RAEX), then their share in the total amount of IT costs will exceed 85%. At the same time the level of concentration of the largest holders of IT budgets differs on the industries.

So, in transport more than 90% of IT costs are necessary on top-5 the largest customers (including the Russian Railway and Aeroflot), in a telecom the share of "five" makes more than 80%, and in an oil and gas industry - about 80% (including Gazprom, Lukoil and Rosneft). At the same time in power and the financial sector the similar indicator is a little more than 50%.

Top-20 IT customers of 2016-2017

* - assessment according to the results of the analysis of the published purchases of the Central Bank of the Russian Federation

The picture with positive dynamics of IT budgets nevertheless has "a big spoon of tar", Tagir Yapparov says:

In model of digital economy, [1] the IT digital enterprise there are boxes technologies for business. It means that for many businesses there are crucial these technologies to develop inside. Actively insourcing grows. And if to look at growth of the same budget of Sberbank, then it, of course, is in many respects eaten by growth of SberTech

In more detail about this trend - in separate material of TAdviser.

Tectonic shift

The Russian IT market approached a new phase of the outlined growth seriously we trasformirovavshitsya. To first "thunder", in 2012-2013, the largest integrators expressed vague concern in a presentiment of the changing rules of the game. Usual (there is enough for a long time prolonged, in realities of global market) the situation with domination of "classical" system integration in structure of IT-Business already then began "fail". Just at that moment profile the Ministry of Telecom and Mass Communications, having updated an office, declared attention vector shift from IT services (in which volume then included for persuasiveness equipment cost, "inflating", thus, a segment whose weight was interpreted as sign of a maturity of the industry) – for benefit of IT products. Deficit of own product offer was converted into one of the main accents of import substitution policy later.

Against the background of crisis changes in economy many integrators appeared before need to adapt or die quickly. Those segments which before "fed" the market in the eyes began to contract. Supplies of equipment, box moving from which in words disowned at the end of the 00th really moved now to a niche non grata. With 2014-2015 integratorsky business is transformed, being displaced towards development of own software products, or in new fashionable niches. In them growth is up to 20% today, note in IT Group.

In "mirror" of 2017 blockchain virtual reality ARVR pilotless devices became fashionable the technology complemented and (/). The fashion – it is rather a reason for discussion, but not a subject of real activities. Though, according to the forecast QIWI, the market the blockchain projects in Russia made about 1 billion rubles in 2017. It can grow due to migration on blockchain platforms and also investments from the party states and development of the Russian Masterchain Russian national blockchain network, consider in QIWI. But the main condition of growth here – formation of critical base of partners and a mature ecosystem. So far the blockchain is far from mass penetration. Pilot projects did not pass to industrial scales yet. Also in order that the blockchain was scaled the worked legal base and uniform standards is necessary.

In more detail about the Russian market of blockchain technologies - in separate material of TAdviser.

The similar limiter "works" and in a segment of augmented and virtual reality (AR/VR) – a considerable part of problems lies rather in legal, than the technology plane. Uniform standards, business cases which little are worked which are financially reflecting advantage of the innovative solutions are not created.

The Artificial Intelligence (AI) and machine learning (ML) which forced out, at last, from an IT lexicon unfashionable big data and also Internet of Things, on the contrary, just in 2017 are displaced from a hype zone in tangible reality. "Landing" is promoted by accurately constructed business cases showing specific effects of implementation of technologies.

Society will buy the cheapest and most high-quality service. It can be provided in the new world only when you have a huge number of data, knowledge of the client and an opportunity to provide any universal service which is necessary to the client, - said during the presentation of the Development strategy till 2020 the head Sberbank German Gref. - Those who understand better than all the clients will quickly learn to provide them banking services

According to TAdviser the size of the market of AI and ML in Russia in 2017 will be about 700 million rubles and will grow to 28 billion rubles by 2020. Assessment was under construction, proceeding from estimates of IT budgets of key customers and a potential share of their costs for the AI projects. The financial sector, retail and the industry will be drivers of this market.

Most of respondents of TAdviser of the organizations applying technologies ML do it for the purpose of cost reduction (72%) and also quality improvement of the products or services (68%). More than a half of respondents consider that AI can provide to business new economic benefits, and the same number of respondents are sure that their costs for AI and ML in the next 3-5 years will grow (under the assumption about a third from them – for 15-20% a year).

According to Accenture, a third of the large companies of the country intends to invest in the next year in machine learning, the built-in AI, video analytics and natural languag processing. Every fifth organization — in robotization, deep training and computer vision.

According to forecasts of Gartner, the artificial intelligence, IoT and a blockchain will become the main areas for the strategic investments in 2018 – their volume in the world will reach $3.7 trillion.

For an example, in insurance the artificial intelligence is applied to document management, processing of client data, selection of risks, fight against fraud, determination of the personalized insurance services and distribution of insurance payments, the representative of Alf Strachowanije Yury Nekhaychuk tells TAdviser.

"Alpha Strakhovaniye" of one of the first implemented the AI elements for solution of the problem of fraud at settlement of losses. A system allows to select among a total quantity of doubtful cases in what really there is a fraud probability from client side, for the subsequent conducting investigations. The AI elements help also with underwriting, at risk assessment and customer analysis, the most part is good clients who can make interesting individual offers of new products and services. In the market of insurance there is revolution - from object approach to individual when each client can receive a personal rate, proceeding from the skills of driving, - he is sure

Along with growth of value of data and development of software products also approach to creation of infrastructure changes.

In 2017 demand was transformed, - We will expand with Urusov%2s of DEPO Computers%3A a product line based on domestic processors Victor Urusov, the vice president of DEPO Computers tells in an interview of TAdviser. - We observe increase in average scale of infrastructure in projects that we connect with process of consolidation and enlargement of corporate infrastructures and also with the growing demand for DPCs. Demand for software-defined solutions grows. Right now there is a change – from classical storage area networks to IP networks of storage. It is connected with the fact that data transfer rate on an Ethernet network in recent years significantly grew, and delays at data transmission decreased. As a result creation of the storage area network based on high-speed Ethernet requires smaller costs and the final solution, than without conceding on characteristics to classical DWH based on such technologies as Faber Channel and InfiniBand

Trends of year

As the key technology trends which were outlined in 2017 for the Russian market TAdviser selects five:

• The helping robotization – or the greatest possible process automation where a system undertakes complete management, and the person is connected only in extraordinary cases. Virtual assistants already become the must have element in the digital strategy of the businesses focused on the better and personalized providing services.

• Smart life – thanks to Internet of Things more and more smart will become housing and public utilities, power, transport and so forth. The increasing number of initiatives of the smart and safe cities will appear through the whole country – the benefit is one of officially recorded indicators of the Digital Economy state program.

• All as the platform – the platform (as well as an ecosystem) becomes one of the main words in a digitalization vokabulyara. Today all need platforms – and platforms are necessary different. The IoT platforms, cloud platforms, the VR platforms, platforms a blockchain, platforms for control of drones, etc. Such projects involve a great number of players, can be under construction on the revenue sharing model and, minimizing costs, will allow to generate new sources of revenue.

• Agile for the sake of time-to-market - interest in Agile from business grows against the background of distribution of the concept of continuous delivery when in a week or even in a day it is possible to release one or several digital-products. Reduction of terms of an output of new solutions to the market – the main accent already not only holders of the biggest IT budgets, but also all aiming to be in time in digital economy.

• The working import substitution – domestic developments becomes more and more, the register of the Russian software constantly is replenished, and the most "powerful" solutions already begin to restrict global vendors. RusHydro replaced ESM Documentum of domestic EDMS from Lanit. Transneft migrates from SAP in Galaktika. The largest user of products of the German vendor, and on a global scale, the Russian Railway expands in 2017 strategic cooperation with same Galaktika and with 1C.

Import substitution in the field of IT is separated into two directions – increase in the added value received in the territory of the Russian Federation and also value addition of the Russian intellectual property as a part of products or solutions. In Russia replacement of import technologies actively develops in the second direction – the Russian work and design documentation, the Russian software is developed, the Russian know-how is applied. Adoption of criteria of an otechestvennost of ADP equipment (resolution No. 719) will help to reinvest in development of localization and creation of productions in the territory of the Russian Federation, - Victor Urusov from DEPO is sure